Posted at 28 December 2023 / Categories Market Roundups
Market Roundup
•Sweden Nov Trade Balance 12.70B forecast, 8.90B previous
Looking Ahead Economic Data (GMT)
•13:30 US Wholesale Inventories (MoM) -0.2% forecast, -0.4% previous
•13:30 US Jobless Claims 4-Week Avg. 212.00K previous
•13:30 US Continuing Jobless Claims 1,875K forecast,1,865K previous
•13:30 US Initial Jobless Claims 210K forecast, 205K previous
•13:30 US Nov Goods Trade Balance -88.40B,-89.56B previous
•13:30 US Nov Retail Inventories Ex Auto -0.9% previous
•15:00 US Nov Pending Home Sales Index 71.4 previous
•15:00 US Nov Pending Home Sales (MoM) 1.0% forecast,-1.5% previous
•15:30 US Natural Gas Storage -79B forecast,-87B previous
•16:00 US Distillate Fuel Production -0.114M previous
•16:00 US Crude Oil Inventories -2.704M forecast, 2.909M previous
•21:30 US Fed's Balance Sheet 7,724B previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro strengthened against dollar on Thursday as investors wagered on U.S. interest rate cuts next year. The U.S. dollar is declining against euro as traders are intensify their predictions that the U.S. Federal Reserve will cut interest rates in 2024 due to the easing of inflationary pressures. On Thursday's data front, Spanish retail sales rose 5.2% in November from a year earlier after rising by a revised 5.3% in October. Markets await the U.S. initial jobless claims data, due at 1330 GMT, for further cues on Fed monetary policy.Investors are betting on an 88% chance of a rate cut as early as March, according to the CME FedWatch tool, a huge swing from a month ago when the probability was just 21%. The euro was last at $1.1117, having touched a five-month peak of $1.1125. Immediate resistance can be seen at 1.1145(Higher BB), an upside break can trigger rise towards 1.1177(23.6%fib).On the downside, immediate support is seen at 1.1066(38.2%fib), a break below could take the pair towards 1.1000(Psychological level).
GBP/USD: Sterling touched a fresh five-month high against a broadly softer dollar on Thursday, putting the currency on track to end the month with gains of more than 1.3%. The dollar is dipping as traders increase bets that the U.S. Federal Reserve will slash interest rates in 2024 amid moderating inflation. Traders are looking ahead to 2024 after Wednesday's announcement that UK finance minister Jeremy Hunt will present the spring budget on March 6, in what is likely to be the government's last major chance to prepare the ground for an election that must be held by January 2025. At 11:19 GMT sterling was unchanged at $1.28, after earlier hitting $1.2825, its highest level since Aug. 1. Immediate resistance can be seen at 1.2807(Higher BB), an upside break can trigger rise towards 1.2835(Higher BB).On the downside, immediate support is seen at 1.2736(38.2%fib), a break below could take the pair towards 1.2665(50%fib).
USD/CHF: The U.S. dollar declined against Swiss franc on Thursday on market expectations that Federal Reserve will start cutting interest rates in the first quarter of 2024. the Fed took an unexpectedly dovish stance in its December meeting, opening the door to rate cuts next year, other major central banks, including European Central Bank, retained their stance of needing to keep rates higher for longer. Markets are pricing in a 88% chance of a U.S. rate cut in March 2024, according to CME FedWatch tool. Futures imply more than 150 basis points of Fed easing next year, though the route to that may be bumpy .Immediate resistance can be seen at 0.8440(38.2%fib), an upside break can trigger rise towards 0.8535 (50%fib).On the downside, immediate support is seen at 0.8335(23.6%fib), a break below could take the pair towards 0.8300(Psychological level)
USD/JPY: The dollar declined versus the yen on Thursday as bets the Federal Reserve will cut rates sharply in 2024 continued to drive dollar lower. An absence of major news has not stopped investors from ramping up bets on rapid-fire rate cuts next year from the Federal Reserve. Futures now imply an 88% chance of a rate cut as early as March, a huge swing from a month ago when the probability was just 21%.The market has about 157 basis points of easing priced in for 2024, and sees rates reaching 3.00-3.25% over 2025. The dollar dropped 0.63% to 140.93 yen , its lowest since July. Strong resistance can be seen at 141.97(38.2%fib),an upside break can trigger rise towards 142.76(50%fib).On the downside, immediate support is seen 140.81(23.6%fib)a break below could take the pair towards 140.00(Psychological level).
Equities Recap
European slipped lower on Thursday as markets looked set to finish the year strong amid persisting hopes that major global central banks could cut borrowing costs next year.
At (GMT 12:33 ) UK's benchmark FTSE 100 was down by 0.16 percent, Germany's Dax was down by 0.20 percent, France’s CAC was down by 0.39 percent.
Commodities Recap
Gold prices steadied after hitting a more than three-week peak on Thursday, deriving support from a weaker U.S. dollar and bond yields as markets wager on rate cuts by the Federal Reserve early next year.
Spot gold was steady at $2,078.35 per ounce as of 1005 GMT, after hitting its highest since Dec. 4, when it last scaled all-time highs. U.S. gold futures were at $2,088.40.
Oil prices fell around 1% on Thursday as concerns eased about shipping disruptions along the Red Sea route, even as tensions in the Middle East continue to fester.
Front month February Brent crude futures were down 90 cents, about 1.1%, at $78.75 a barrel by 1141 GMT in subdued trade ahead of their imminent expiry, while the more active March contract was down 69 cents, about 0.9%, at $78.85 a barrel.